Using SEO to add millions to your startup’s valuation
Patrick McKenzie (a.k.a. patio11 of Hacker News fame), writing on myGengo about why SEO is so important for customer acquisition for the vast majority of startups:
Most startups do not have product problems. The product works. Most startups do not have design problems. The product looks pretty. Most startups DO have customer acquisition problems: they lack a repeatable way to find a new person, convince them to use the product, and take their money. Startups which do not have customer acquisition problems have *already won*: there is no longer a question of whether they will survive to exit, the only question is for how much.
Then, later in the post McKenzie writes:
Consider two startups trying to raise a Series A round:
- Startup A: good product, gigantic market, users like it, 10,000 users
- Startup B: good product, gigantic market, users like it, 200,000 users
Startup B is likely going to receive a higher valuation from investors because it can demonstrate more traction and because the perceived risk is lower. They’ve already removed a key risk factor — can we scale customer acquisition — from their investors.
Great article.