Sometimes Startup Advice is Really Good
Sometimes the advice offered to startups is really good, as in this piece by Fred Wilson on Growth vs. Retention (emphasis added).
Entrepreneurs always ask what the one number they should focus on for raising money. I always say “90 day retention numbers for your acquisition cohorts”. There’s a common view in silicon valley and around the tech sector that growth is the one thing you should focus on. But it’s hard to grow if you are churning your users. And if you are paying for user acquisition, as many startups do in search of growth, then retention/churn becomes even more important.
I look at something like this and try to apply it to BP3’s business. In our business, you could say that customer acquisition is quite expensive – maybe not in terms of ad-spend or marketing spend, but in terms of the cost of a very personal sales process. 90 day retention is very important. We’re laser focused on retention in general, because it is so important to the health of our business, and it is such a great signal for the quality of our services. We focus on retention well beyond 90 days, but 90 days is a good checkpoint on how we’re doing to that point.
A big part of retention in the long run is community. BP3 invests in community only secondarily to service. That investment includes our annual BPMCAMP – which concluded to rave reviews in August. Just a few quotes from our customers after BPMCAMP:
“I got more new ideas from two days of BPM Camp than I have in the past two months at work. It was a great way to connect with other BPM practitioners, learn more about the industry, and simply get inspired. I look forward to coming back next year.”
“This is a great event. I will come back year after year. This is a conference you go to when you want to learn. I was so happy not to be sold here but to learn from the experts.”
“An amazing opportunity to meet the BP3 experts. Great content, great people, great event!”
If you read this far, one more thought to take away with you: synonymous with “retention” is “taking care of your customers”…