OnStartups

As an angel investor and startup advisor, one of the key metrics I’ve begun looking at is how the founders are creating visibility and presence online.  One of the simplest proxies for this is to look at the traffic on their website.  The effectiveness of this is not limited to just Internet-based startups.  Just about any software startup that is looking to do business in today’s world should be spending some time getting savvy about Internet marketing and using their website effectively.  

I am by no means an expert on Internet marketing, but I think much of what is important can be distilled down to a few important questions. 

Startups:  How Good Is Your Internet Marketing? 

1. When did the startup establish it’s website?  I’m curious to know how much time elapsed between when the company started and when the website was put up (even a minimal one).  If months and months go by, and the startup still doesn’t have a website, I get a little concerned.  General rule of thumb:  If your startup is far enough along to talk to anyone outside your immediate circle of friends and colleagues – you should have a website.  One of the first things people will do after talking to you in person and hearing about your startup is to try and find you on the web.  Not to have a website misses this opportunity to convey your message (however fluid).  If you don’t exist on the web, in the minds of many people, you don’t exist at all.

2. Does the startup maintain a blog?  I have a bias here, but I think startups with founders that write a blog related to their business/market are more “plugged in” than others.  Writing a blog forces you to think about things and commit it to writing.  Chances are, you’ll get comments from other people (often competitors) that are thinking about similar things.  I’m less interested in founders that can keep secrets and more interested in those that can keep connections.  A blog builds some of those connections early on.  It is also one of the key ways to build website traffic and rank higher on the search engines.

3. Is web traffic being monitored?  Strangely enough, many startups don’t know what their website traffic is or how it changed over time.  Given the number of free and near-free tools out there that help with this, there is no reason for this.  Even if you’re only tracking on some of the key metrics (like page views and unique visitors), this is still better than nothing at all.  Savvier founders also track things like where their referrals are coming from, which search phrases are being used to find them, etc.

4. What’s The Website Ranking?  Though the value of various ranking mechanisms (Google, Technorati, Alexa, etc.) is often hotly debated, one thing that is reasonably clear is that if startups that have high rankings didn’t fall into it by accident.  So, although this is not a reliable proxy for predicting the odds of success for a startup, it is a decent signal for indicating how much conscious effort the founder is putting in to raising visibility on the web.  In most cases, it is impossible to get a Google Page Rank of 6, be in the top 1,000 in Technorati or otherwise rank reasonably high by accident.  It takes effort – and time. 

5. What’s The Bottom-Line Impact?  The best possible case is a startup that can clearly state what their traffic numbers are, how they’ve changed over time and what kind of relationship they’re seeing between traffic and conversions (either to customers, qualified leads or trial users).  The savviest startups have some idea of what their Google AdWords expense would be and what the return on that investment is.  At the end of the day, the traffic is only important to the degree it creates some bottom-line impact.

Summary Of My Point:  In today’s world, just about every software startup is at some level an Internet startup and it’s critical for founders to get really good at Internet marketing.  This means learning about the tools and techniques.  It also means making the investment of time and energy to experiment and try things out.  All other things being equal (which I will admit, they rarely are), the startup that is more savvy about using the Internet as a way to market their offering wins.