intric8

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.