How a Bootstrapped Startup Out Marketed My MultiMillion Dollar Company


The chances are you don’t have a ton of money. And that’s okay. So how do you compete with these multimillion,
if not multibillion, dollar companies out there? Hey everyone, I’m Neil Patel and today I’m
going to teach you how bootstrap startup out marketed a multimillion dollar company. One of the companies I created is called Kissmetrics. I no longer work there but you’ve probably
heard of it. If not, you can check it out. When I was there I raised millions of dollars. That company raised anywhere between $15 and
$20 million dollars. That’s a lot of cash. We had a competitor called Mixpanel. Do you know what the difference between Mixpanel
and us was? They raised a lot less money when they were
starting off and their product didn’t really have any innovation. When we started off we created a new product
for our market. Mixpanel took our exact designs, they copied
them, they released them, they out marketed us, they raised very little to no money and
they ended up becoming worth more money? How much more? Well at one point they were worth over $800
million according to TechCrunch.com and we weren’t even worth $100 million. How can that be when we get way more traffic
than them, right? If you go to Alexa.com, our Alexa rank on
Kissmetrics.com is way better than Mixpanel. And the blog on Kissmetrics.com gets over
a million unique visitors a month. So how is it? They decided to go the freemium route. They took our product, copied the designs
and be like, “You know what? It doesn’t matter if our product is better
or worse than yours, we’re just going to take it and release a free version out to the market.” Nothing beats cheaper price. If someone’s charging a lot of money and you
can create the exact replica of that product or service and release a free version of it,
even if it doesn’t have all the features, you will crush your competitors. Why? Because people are price sensitive. And no one wants to pay thousands of dollars
for something that they can get for free. And when Mixpanel released that product for
free they said, “Hey, if you’re on the free plan you need to put a Mixpanel badge on your
website showing that we provide you analytics.” And a lot of startups were like, and companies
even, they’re like, “Okay, sure. We’ll put your badge if you give us your product
for free in a limited version.” That’s how they grew. So if you want to grow your company faster
you don’t necessarily have to create a better product or service than these big, multimillion
dollar companies. Just figure out how you can offer more for
less money or a portion of your product or service for free. If you do that you’ll grow really fast and
these big companies have no choice but to buy you. It’s the same reason why Intuit bought Mint.com. It’s not that Mint.com was the best service
out there. They just had a really good free service. And Intuit, this multibillion dollar company
was like, “Whoa, this startup is going to eat our lunch. We can’t lose billions of dollars from this. Let’s just buy them for a few hundred million
dollars.” That’s how the world works. So release something for free or cheaper than
your competition and eventually you’ll start gaining on their market share.

, , , , , , , , , , , , , , , , ,

Post navigation

10 thoughts on “How a Bootstrapped Startup Out Marketed My MultiMillion Dollar Company

  1. Great story and true. You always have to look for that one small tweak that will make all the difference in the end result. Keep testing and implementing.

  2. Hey Neil Thanks for the sharing this, we have very good cheaper price furniture to our competitor but how should we know more people about it to get more business?

  3. Great video Neil!! But what if we are the category creators/first movers … doesn't free look better when compared to existing paid options offered by competitors?

  4. I love how you have no ego, Neil. You’re just a stand up honest guy with such great values. We’re lucky to have you and that you share all your knowledge for free. #legend

Leave a Reply

Your email address will not be published. Required fields are marked *