Weekly Roundup #78 - Startup Costs, Javascript & You | Spot Studio
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Weekly Roundup #78 – Startup Costs, Javascript & You

Last week we covered the pros and cons of single or double opt-in for email subscribers, how to understand customer satisfaction and how to define your company’s North Star metric… Find that here.

This week we look at:

 

Startups: The Varying Costs of a Startup

Startup Business

The tools to set up a startup business have become increasingly more available, and, crucially, more affordable. For examples, using open source software has eradicated the need for paid developer tools, there is the option to use pay-per-click advertising instead of expensive, more traditional adverts, and App stores make global distribution an efficient and affordable process.

Storing data in the Cloud rather than using a datacenter has also brought many advantages to the startup. As competition between cloud providers has gotten hotter, the price for the user has come down significantly – in the past three years prices are down by around a quarter according to Citigroup. Some providers, such as Microsoft, now provide their services for free to startups, in the hope that they will become paying customers later down the line.

Although the price of building a startup seems to be getting cheaper, getting traction is becoming more pricey. There are two main reasons for this – salary and overheads are very high, particularly in the city, and secondly, as growth has become more difficult companies are moving towards paid acquisition to scale up.
Startups are evolving away from virality, SEO and organic strategies, and they are instead raising more money to get traction, they are trying paid marketing earlier, they are more likely to use paid referral programs rather than virality and they have deep monetization in order to open up paid channels. Lets take a look at each of these factors.

The median seed money for a startup has tripled from 2010 to 2016 – from $272,000 to $750,000. Companies are trying to raise bigger funds, often from non-traditional investors, to drive growth for the next fundraising effort, or for an exit.

Trying paid advertising early on means that you can experiment with it – working out what is best for your company. It is possible to run meaningful tests with a very low budget – which could positively affect a startups advertising from there on out. Sriram Krishnan, ex-Revenue Products at Snap, Mobile Ad Platform at Facebook noted that,

“advertisers of all sizes expect platforms to offer them a number features as basic built-ins: self-serve, hyper-targeting, analytics, dynamic pricing. The way ad platforms are now structured with these features allows you to run small tests with sub-scale campaigns. It takes minimal time to make the creative, and it’s super easy to do testing for startups and new products.”

Paid referral programs help build user engagement and allow companies to bring in more users. And crucially, bring in more users who are already connected to one another. Think of paid referral programs as another form of paid spend – you will have the same customer-acquisition-cost (CAC) but instead of giving the money to Facebook or Google, you give better value to your users and their friends.

As the cost of building a startup is rising, companies have to either raise more money or make more money. Companies are optimising their Loan-to-Value (LTV) ratio, in order to justify their higher CAC. With a high LTV comes a profitablility – and with that comes a competitive edge in acquisition as a strong LTV affords a company a higher CAC and the ability to out-invest any competitors.

For a successful start up it is imperative to understand which areas it is important to spend more money in, and which areas and technologies money can be saved in. And the above tips should point your spend and strategy in the right direction for the current climate.

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Automation in the Workplace

digital automation image

Are you a techno-optimist, or a techno-pessimist? For those with a glass half full, the future sees technology provide us with considerable gains in productivity for the economy that will, in turn, create new work opportunities. For those with a glass half-empty, they envision a world where an increase in technology has brought about a mass destruction of jobs.

Automation will certainly change the job landscape, but whether it is for the better or worse is widely debated. Roughly half of the tasks that people do can be automated – a huge number – however, only 5% of all jobs can be entirely automated. This may mean that although automation and AI will affect many jobs, it will most likely only mean that people can give elements of their daily tasks to a machine, or that their job will shift or evolve in another direction.

Working alongside technology is something that has gone on throughout history – from the farmer working with machinery that helps harvest and sow crops, to the office job that was once aided by a calculator, and is now helped by software and computers.

An interesting example of automation at work is the bank. Automated Teller Machines (ATM) have seen the role of the bank teller change, however, since the introduction of the ATM, there are no fewer bank tellers in employment. What has happened is that the ATM automated the time consuming but low value tasks, and the tellers are now involved in selling customers other types of financial products – doing what is called higher value added services.

In order to maintain or grow the GDP per capita it is suggested that automation is imperative. The ageing population means that it is possible that countries will not have enough workers – and without enough workers economic growth will suffer. Adopting automation and AI is a way to ensure that productivity is maintained, and that the economy is kept buoyant.

Mass unemployment is often discussed in relation to the automation of jobs, however, a more accurate phrase to describe the situation in which we are likely to find ourselves is mass redeployment – meaning that finding meaningful work and retraining the work force will be the most likely challenges that we face.

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The Relationship Between Your Inventory and Abandoned Carts

Stock

If you own an online store, you may have noticed that with ‘inventory control’ enabled, when someone adds a product to his or her cart it is immediately reflected in the inventory. This is a very useful and efficient feature, however, it relies on the customer continuing with the purchase.

The inventory is affected prior to the purchase, and so in the case of an abandoned cart, the inventory becomes incorrect for a certain period of time. This may not affect every type of business, however, for a company selling unique items or with limited numbers of each item this could prove to be frustrating.

The default cart life span is 24 hours, however, by adjusting the settings it is possible to bring this down to an hour – meaning that your online store will have a far more up-to-date and accurate depiction of your inventory. The more you know…

Source

JavaScript: How Recent Changes Will Affect Your Website

Javascript

Google has announced that it is parsing JavaScript – now processing content within the DOM. Tools that provide backlink data are only seeing HTML elements listed within a given page’s source code. JavaScript-based link referrals (JavaScript redirects, dynamically inserted tag links or URLs associated with JavaScript onclick events) are specifically not being captured.

Searchengineland.com set up a test to better understand what was happening to these JavaScript-based links, and whilst the URL ‘strings’ were present in the source code of the page, they were associated with onclick events and not within the href attribute of the element. Of the three links that were included in the test by searchengineland.com, Google Search Console (GSC) picked up and reported on all three – however the same links were not reported by any of the top backlink data providers, who included Majestic SEO, Ahrefs, Moz Open Site Explorer and SEMrush.

If Google is able to parse JavaScript then these types of link referrals may also be considered when analyzing profiles for webspam. It is likely that Google considers these JavaScript-based links as part of their link penalties – and so if the webmaster is unable to see this data within their backlink data tools, their ability to ensure their profiles comply with the rules is greatly compromised.

It is advised that those attempting to review and monitor their backlink profiles do so using multiple data providers – not just GSC. To explain why, there have been instances where the example link provided by the Google Webspam Team in a Manual Action message was not found by any backlink tools, including GSC. Whilst this is a rarity, it shows why it is important to use many backlink data providers to get a full picture of your backlink profile.

JavaScript-based link referrals are given the same weight as 301’s – and Google has confirmed that it primarily looks at the DOM rather than the source code of the page. Therefore, dynamically inserted elements would be viewed the same as if they were located within the source code.

To rectify the problem, backlink data providers will have to catch up to JavaScript-based link referral reporting. In the meantime, it is possible only to rectify any webspam issues and to show due diligence to Google’s Webspam Team.

Source

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by:

Sebastian Paszek

Marketing manager

Controlling the chaos of the digital landscape, Sebastian is a multiplatform executive, project manager and photographer.