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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

#181

Post by anstosa »

awb wrote: post #48
anstosa wrote: post #23

Earlier quoted context omitted.

Ansel from PSL here. Absolutely. Because we're venture-backed and are spinning out venture-backed companies, we are limited to billion dollar ideas. It's not uncommon for us to kill great ideas that could "only" make tens of millions of dollars. We're hoping through blog posts like this and other means to be able to share more of them because we want those companies to exist, we're just not set up to create them!

> we are limited to billion dollar ideas How did matchmaking for music lessons get into the discussion as a billion dollar idea? Referrals for tutoring in any subject (math, reading, music, etc.) would be a bigger market, but even then it might not be a $1B company.

Brainstorming and validation rarely starts with a perfect idea. It starts with some about of demand, an unsolved problem or an inefficient market. We start to dig and as we talk to potential customers we get a better understanding of the problem and pivot accordingly. Sometimes we end up unearthing a great idea, sometimes not. It's worth remembering that finding billion dollar business narratives often involve some amount of market creation or expansion. It's not just "can we capture enough of the market that exists". It's "would customers pay more for a better experience?", "would more people become customers if the process was easier? Or cheaper?".

- Ansel from PSL

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

#182

Post by anstosa »

IAmGraydon wrote: post #63
lowdose wrote: post #3

So these guys have to read up on some articles about multisided marketplaces which what they were testing. Starting a matching platform between consumers and teachers is not a feasible plan because this is a longer term relationship and a platform is easily cut out. A platform like uber works because nobody has a regular cab driver. Supply and demand matching is also terrible for dog walking platforms. Don't spend ti…

Not only that, I’m amazed that VCs call the awful ads they tested “marketing”. What they created is simple, uncompetitive, uncreative advertising, and that kind of thing doesn’t stand a chance in today’s world. Of course it performed terribly. Marketing today takes just as much creativity as the product you’re selling. Actually, I would argue it takes more in many cases. It’s like building a race car and putting low…

We specifically avoid "creative" ads. We know how to make ads more effective but that's for when we have a business we're trying to grow, not for when we are trying to determine if there's a business at all. We want to distill a very specific value proposition and target demographic in each ad. If the value prop resonates, they will click and they will convert regardless of ad "creativity". If we were just trying to juice numbers, we wouldn't learn anything whether and which value propositions are effective.

- Ansel from PSL

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

#183

Post by asfarley »

edouard-harris wrote: post #50
teej wrote: post #37

Earlier quoted context omitted.

I’ve seen some writing on what makes marketplaces resilient to “supply side defection” as you call it, but I’d love to hear your take. Specifically I’d love to hear more about structuring to leverage the relationship, or anything else you think is important. What specific structural things are important?

Generally speaking: your participants will use you when they need you and cut you out when they can do so cheaply. This isn't an indictment of them: it's completely rational for them to do this. But that means it's up to you to add value to the transaction, until the perceived cost of defection is higher than the platform margin. Airbnb did this beautifully: they set up insurance for all their hosts, and so were able…

Upwork (formerly elance) is a good example of a platform which could leverage the relationship by providing better intermediary services (like dispute resolution). In practice, they don’t, and there is no real reason not to defect.

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

#184

Post by anstosa »

vi-mode wrote: post #129

A wall of text intended as smart content marketing to get some awareness for a rather unknown investment firm or incubator--Crunchbase didn't show any raised funds, so I don't call them VC. The long, over-polite text, the fake landing, the ad test weren't required in the first place. Why: The immediate answer every experienced VC would give is a simple 'no, this isn't a VC case' without all this fuzz and waste of tim…

Ansel from PSL here. PSL Studio has raised $28.5M. PSL Ventures has raised $85M. We have spun out 20 companies over 4 years. 6 of which are in the 50 Seattle companies to watch in 2020 (https://www.builtinseattle.com/2020/01/21/50-seattle-startup...) and of the early-stage venture backed companies who raised money in 2019, over 12% where PSL companies.

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

#185

Post by anstosa »

Johnny555 wrote: post #74
ChicagoDave wrote: post #71

I’ve always been annoyed with the fail fast model. The only group that benefits from fail fast are VCs looking for a big score. They push entrepreneurs to invalidate instead of teaching/helping them how to build a business. It’s all ass backwards. But for the VC, if they see a hundred good ideas invalidated by bootstrapping founders, they save time and money. The founders are the suckers if they listen to this bull c…

The only group that benefits from fail fast are VCs Doesn't the entrepreneur also benefit if it keeps him from pursuing a business that will never work? Otherwise they may become a victim of the Sunk Cost Fallacy -- after investing so much time and money into their business, they don't want to give up. The key, of course, is knowing if you really have a failing strategy, or if you just having devoted enough time/mone…

Ansel from PSL here. You're exactly right. The entrepreneurs we work with want the best shot at a winning idea. Just because we decide to kill an idea doesn't mean we don't end up finding something else in the same area to work on together. It also doesn't mean they can't go do that idea by themselves if they disagree. PSL does not hang onto any rights whatsoever after killing an idea.

It's also worth noting that only half the companies we end up spinning out were generated by entrepreneurs. The rest (including XYLO) are generated and validating in-house before we even seek an entrepreneur to partner with.

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

#186

Post by woutr_be »

Johnny555 wrote: post #154
woutr_be wrote: post #116

Earlier quoted context omitted.

Correct, and if that maid is a match, you proceed. How is that different from a dating site? In theory they only have to match you with one other person. But my main point was; on dating sites the middle man is almost always cut out instantly. Usually you try to immediately exchange numbers, and then proceed from there.

I don't know if you're tried online dating, but in my experience, it hasn't been "sign up for a month, find your wife and you're done". I spent several years off and on with online dating (went on a lot of first dates, fewer several week relationships, and a few multi-month relationships) -- dating sites tend to give a steep discount for longer term (6mo, 12mo) subscriptions, so I was a subscriber for most of that ti…

That's a lot of assumptions tho.

My experience with online dating has been the same, however mostly it's; match with a person, exchange a few words, exchange numbers, move on to WhatsApp. Yes, I do need to go back, but the middleman is almost always cut out instantly.

That said, my experience with finding a housekeeper has been the opposite of yours. I've had 4 different ones, and I ended up hiring none of them. This is not necessarily due to their professional skills, but mostly due to availability and trust. Just like finding a romantic partner. It's easier, but definitely not like you described for me. Hence why I saw them both as the same thing.

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

#187

Post by testingworks1 »

As a musician myself, who has also been taught by music instructors over the years, I find this idea strange. Musicians are artists. They are also not beholden to market trends. Music instructors tend to be picky about who they accept when they choose their students.

Music is also a person to person thing. Those who are truly serious about learning will choose a person to person connection.

This is an interesting case of trying to quantify a subjective subject. Music is an art. It's hard to quantify. Musicians (mostly instructors in this case, then a bit later the students) will most likely shy away from this form of making a commodity of something that is inherently personal and expressive.

This model is mostly likely going to fail not because of the numbers, but because of the subject at hand.

This is an interesting case study. And it makes sense, the numbers prove that it's not viable. The fact that it's not viable isn't the numbers, however.

It's something to consider.

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

#188

Post by Johnny555 »

woutr_be wrote: post #186
Johnny555 wrote: post #154

Earlier quoted context omitted.

I don't know if you're tried online dating, but in my experience, it hasn't been "sign up for a month, find your wife and you're done". I spent several years off and on with online dating (went on a lot of first dates, fewer several week relationships, and a few multi-month relationships) -- dating sites tend to give a steep discount for longer term (6mo, 12mo) subscriptions, so I was a subscriber for most of that ti…

That's a lot of assumptions tho. My experience with online dating has been the same, however mostly it's; match with a person, exchange a few words, exchange numbers, move on to WhatsApp. Yes, I do need to go back, but the middleman is almost always cut out instantly. That said, my experience with finding a housekeeper has been the opposite of yours. I've had 4 different ones, and I ended up hiring none of them. This…

My experience with online dating has been the same, however mostly it's; match with a person, exchange a few words, exchange numbers, move on to WhatsApp. Yes, I do need to go back, but the middleman is almost always cut out instantly.

But don't they already have your money by then? They don't care if you stop chatting within their platform since you've already paid

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

#189

Post by woutr_be »

Johnny555 wrote: post #188
woutr_be wrote: post #186

Earlier quoted context omitted.

That's a lot of assumptions tho. My experience with online dating has been the same, however mostly it's; match with a person, exchange a few words, exchange numbers, move on to WhatsApp. Yes, I do need to go back, but the middleman is almost always cut out instantly. That said, my experience with finding a housekeeper has been the opposite of yours. I've had 4 different ones, and I ended up hiring none of them. This…

My experience with online dating has been the same, however mostly it's; match with a person, exchange a few words, exchange numbers, move on to WhatsApp. Yes, I do need to go back, but the middleman is almost always cut out instantly. But don't they already have your money by then? They don't care if you stop chatting within their platform since you've already paid

> But don't they already have your money by then? They don't care if you stop chatting within their platform since you've already paid

I suppose so, if you pay for it, most of them are free. But that's besides the point, I just had a different experience from most people here, after 4-5 different housekeepers, I gave up and ended doing the work myself. So in that aspect, my experience has been the same as online dating.

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

#190

Post by TrackerFF »

edouard-harris wrote: post #50
teej wrote: post #37

Earlier quoted context omitted.

I’ve seen some writing on what makes marketplaces resilient to “supply side defection” as you call it, but I’d love to hear your take. Specifically I’d love to hear more about structuring to leverage the relationship, or anything else you think is important. What specific structural things are important?

Generally speaking: your participants will use you when they need you and cut you out when they can do so cheaply. This isn't an indictment of them: it's completely rational for them to do this. But that means it's up to you to add value to the transaction, until the perceived cost of defection is higher than the platform margin. Airbnb did this beautifully: they set up insurance for all their hosts, and so were able…

Yes, you even see this on marketplaces like Ebay, etc. Once you've established a relationship with some buyer / seller, it doesn't take long before said marketplace gets cut out from the equation.

I sell a lot of expensive stuff on the web, and I'd say 80% of my buyers are repeat buyers that started contacting me through mail after a couple of deals.

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