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How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

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Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#11

Post by virgilp »

arnaudsm wrote: post #9

It's crazy how markets saturate quickly online. You really need a large marketing budget and/or network effect to triumph nowadays, product quality is not differentiating enough. I am scared for the future, this will inevitably lead in harder-to-break monopolies. I worked for an entire year on a next-gen comparison engine (picked.cc if you want to check it out), and even with exciting user feedback and crazy conversi…

> even with exciting user feedback and crazy conversion rates, it probably will never scale

How so? With crazy conversion rates, all you need is capital. Capital is readily available nowadays, if you need that marketing budget you can get it. Unless you do something inherently stupid like selling 1$ for 50 cents...

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#12

Post by boffinism »

tempy_tempy wrote: post #5

A "startup studio" and a "venture capital fund" ??? no conflict there !! Like, great, please send us your detailed startup plan and then come pitch and answer our questions, and then.... well, its not a good match and we pass 99% of the time, but hey, look at this back office studio we got going here, trying out new ideas we have never heard of before.

I think you misunderstand how VCs work. If you come to them with a strong idea and evidence that you have built up that it will work and a plan for how to move forward and the right people and you try to get them to take equity they have really no incentive to to say no to you and try to build the thing themselves without you, when it would be so much easier just to help you build it.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#13

Post by throwawayjava »

netsharc wrote: post #7
cabaalis wrote: post #2

This is very useful insight that I want to apply to my own planned side-projects (like 30-something domains registered as ideas...) Too often I've thought "that's a great idea" and then focused on the tech of implementation rather than the viability. At that point it's just a hobby, or skill-sharpening exercise. Regarding the example shown, I would think that "uber for" ideas (meaning facilitate a connection between…

Reading this article and seeing these replies, I feel like a communist who accidentally walked into a Davos hotel lobby during WEF. What about just making a website to connect learners and providers? This commission-taking, the Uber model, such effing rent-seeking. I mean I also don't work for free, but things like "Uber-for-dog-walkers, but we'll fine you much money if you arrange dog walks outside of our service. A…

> such effing rent-seeking

That was also my take-away regarding this idea.

20% cut? For match-making on private music lessons? Fuck that. Our local music store charges less than that for renting an hour in a soundproof room! And the discoverability/match-making "platform" is a free bulletin board next to the restroom...

Also love how that email described the radical act of checking the local music store's bulletin board (or going and asking a friend/coworker/etc. for a recommendation) as "under-the-table neighborhood activity".

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#15

Post by jjn2009 »

justaguyhere wrote: post #6

Wow, didn't realize adwords and FB ads are so expensive. How do small businesses compete? are there any alternatives for those with smaller ad budgets?

You kill the idea because it is so expensive, if you cannot easily reach consumers for a small amount of money then the demand side is low. It's cheaper to reach consumers who are willing to click links because they actually need a service.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#16

Post by arnaudsm »

virgilp wrote: post #11
arnaudsm wrote: post #9

It's crazy how markets saturate quickly online. You really need a large marketing budget and/or network effect to triumph nowadays, product quality is not differentiating enough. I am scared for the future, this will inevitably lead in harder-to-break monopolies. I worked for an entire year on a next-gen comparison engine (picked.cc if you want to check it out), and even with exciting user feedback and crazy conversi…

> even with exciting user feedback and crazy conversion rates, it probably will never scale How so? With crazy conversion rates, all you need is capital. Capital is readily available nowadays, if you need that marketing budget you can get it. Unless you do something inherently stupid like selling 1$ for 50 cents...

I was a student in debt at the time. Fortunately this project caught the eye of a fellow HNer and helped me get my first job in the bay area.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#17

Post by jtolmar »

Neat article. It's definitely a good idea to get actual numbers to estimate total addressable market, CTR, and CPC. However I want to call attention to this bit:

> First off, there are a ton of enabled small businesses competing in this space and I'm not sure there needs to be a middle man. For example, I get 4 ads from businesses in Seattle offering lessons for guitar on Google. Thus, they know how to market and get customers, they are offering free first lessons, and have availability. So I am unsure/doubt there is any real consumer problem.

If your idea doesn't solve real consumer problems, kill it. It doesn't matter if the total market, CPC, and LTV are all amazing, this is sufficient. Even if you succeed, all you'll have done is shuffle some money around. Go make things that actually help people.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#18

Post by tmpz22 »

jtolmar wrote: post #17

Neat article. It's definitely a good idea to get actual numbers to estimate total addressable market, CTR, and CPC. However I want to call attention to this bit: > First off, there are a ton of enabled small businesses competing in this space and I'm not sure there needs to be a middle man. For example, I get 4 ads from businesses in Seattle offering lessons for guitar on Google. Thus, they know how to market and get…

I agree but would add the caveat that many market niches have a surprising amount of depth that may warrant further discovery. For example TAKE one of these guitar lessons and if some creepy person comes up with a windowless van and gives an awful lesson there may be demand, just the demand is more hidden.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#19

Post by oblib »

tempy_tempy wrote: post #5

A "startup studio" and a "venture capital fund" ??? no conflict there !! Like, great, please send us your detailed startup plan and then come pitch and answer our questions, and then.... well, its not a good match and we pass 99% of the time, but hey, look at this back office studio we got going here, trying out new ideas we have never heard of before.

Sounded to me like they were paid for testing the idea for both the startup founders and investors because that's a specific service they offer.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#20

Post by anstosa »

jjn2009 wrote: post #15
justaguyhere wrote: post #6

Wow, didn't realize adwords and FB ads are so expensive. How do small businesses compete? are there any alternatives for those with smaller ad budgets?

You kill the idea because it is so expensive, if you cannot easily reach consumers for a small amount of money then the demand side is low. It's cheaper to reach consumers who are willing to click links because they actually need a service.

Ansel from PSL here.

That's not quite right. Ad pricing is a marketplace like any other. The "demand" in the marketplace is demand by advertisers to get in front of any particular set of eyeballs. The price will be high if many advertisers are interested in the same group of people (and low if not). Price is an important metric for determining customer acquisition cost but you can't use it to infer customer demand. You instead use impressions, click through rates, and conversions rates to do that.

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