Marketing Yourself Broke

WARNING: Don't market yourself into bankruptcy!!!

Understand the math your business is built on.


Let's say you have $10,000 to spend on your business.

You’ve spent the last 6 months building the perfect app. It's revolutionary! You know there's a need for it. You've walked door to door to small businesses and they *all* said they would use it. You asked your friends, and they think it's great.

Time to put that $10k towards marketing, right?

That would be the WORST mistake! Let's do the math ...

So, you think your app is practically done and it won't cost you anymore - but you're going to discover shortly that when it comes to development apps are *never* done.

Here’s some rough numbers based on my experience working with tech-based startups.

  • You need a minimum of $2,000 in dev spend each month. More if you actually attract the users you want, because — surprise! — they will want you to make changes.

  • Then marketing, that's another $2,000 in ad spend each month, because let's be honest nothing really goes viral on it's own.

  • And that $2,000 is just the ad spend. Unless you really want to learn to manage ads yourself, you’ll be hiring an agency (minimum $5,000/mo on top of ad spend), or hire staff more cheaply costing at least $3,000/mo. Word to the wise: don’t hire anyone cheaper than that, or you’ll get amateur service and poor results.

We’re already at *minimum* $7,000 a month. And this minimum will likely grow as your user base (both free and premium) grows. And haven’t even taken into account your income.

Let’s say you have a $12,000/mo burn rate for an app that you are pricing at $12/mo. That's 1,000 users, paying, to be on your app— just to break even on the burn rate!! How realistic is it that you could get to that number with your $10,000?

Usually for startups only 3% of users become paying users ... let's round that up to 5%. You need 20,000 users on your app to cover your expenses. If all that money went to ad spend you'd have to get leads for $0.50.

Good luck with that!

So what am I saying? Am I saying that app-based businesses never work? Of course not! What I am saying is that early on, the numbers for app *only* businesses don’t make sense. Your app should be an add-on to a high ticket service, or something you pursue after you’ve already built a stable, successful service business.

Why? Let's look at this another way:

If you believe that you can add value to your users let's think bigger. Why not find a way to charge them $1,200 for a service RELATED to your app. What's harder -- selling 1,000 people $12/mo service or 10 people a $1,200 service?

If you know what you're doing, the latter is FAR easier. But if you've never sold services the former is more attractive cause strangely it SEEMS easier. But I'll tell you a secret, it's easier to ask for (and get!) $5,000 from someone than it is to get $5 from 1,000 people.

Selling is selling, and it's hard!

Those 10 clients at a high price point keep your company afloat and generate *real* revenue. Then, with that revenue, you can pursue the app of your dreams and leave a larger legacy.

Bottom line is, if you don’t have a sizable income stream *already*, then you're going to go bankrupt chasing users. You’ll turn to investors out of desperation. You're going to give up on the "company" when it fails to meet your needs.

This is my tough love message ❤️

Your startup should be built to serve -- yourself and your clients. Build a business around the service that you want your app to automate. Then you'll be on the right track.

Only after that can you scale.

If you don't want to make this mistake talk to me,