How to Tackle the Long Tail

I’m now two seasons into my podcast “Be About It” where I interview founders who are solving meaningful problems.
So far, I’ve had 15 amazing founders on my podcast. Each one is solving a real pain point experienced by 80% of the USA — individuals making under $100K and small business owners.

Across the founders I interviewed, there was a single pervasive concern. When you target such a large population, how do you actually reach them? Reaching the top 20% is not easy, but it is relatively straightforward. The toolkit for most includes some cocktail of Facebook/Google ads, App Store hacks and modern design.

Reaching individuals and small business owners located in the remaining 80% is much more complicated.

Their interests are varied, they are not all located in one online community and are very hard to please because they have to see immediate ROI in their purchases.

They do not have excess capital to be as patient as the top 20%.

I saw this first hand when I was working in the NYC Department of Consumer Affairs in the Mayor Bloomberg years. There, I was tasked with managing the product launch of SaveUSA across New York City. SaveUSA was created to demonstrate that a progressive tax policy that incentivized low-income tax filers to save some of their tax refund could impact the wealth gap.

Essentially, I was in charge of finding people to give free* money to. Easy right? No. From the marketing — where do you find low-income tax filers? — to the onboarding & engagement — how do you keep these tax filers engaged over a series of months?, my experience at SaveUSA was a deep dive into the complexities of targeting a diverse population.

In SaveUSA’s NYC campaign, here’s what really worked for us:
Meet folks where they are. I learned how to do taxes (*shout out to VITA*) so that I could help folks with their tax filing and then enroll them into the SaveUSA program. This helped us understand exactly what the main pain points were for tax-filers and address them immediately. Also doing someone’s taxes really builds their trust.
Be respectful of their time. When we incorporated an ability to sign-up for SaveUSA into the flow of tax filing — which was difficult because a critical piece of signing up for SaveUSA included opening a new bank account — we saw a huge increase in take-up rate.
Speak to their best selves. One of the selling points that worked best for us during SaveUSA was speaking to the tax-filers’ best selves. This is especially hard in a culture that treats poverty as an illness. But framing questions around: “How can we figure out how to pay the most critical bills now and save the rest?” instead of “Why haven’t you paid those bills yet?” worked wonders.

It was enlightening to hear additional techniques on how to engage this segment from the founders I talked to on the podcast.

Here are the top 3 recommendations I learned from the founders I interviewed:
Do your research. Jimmy Chen at Propel shared how important it is to conduct deep customer interviews to understand how to build the most intuitive product possible. 🎧
Don’t reinvent the wheel. Chai Mishra at MoveButter discussed how important it is to work within the ecosystems that exist for the communities you are trying to serve. 🎧
Build a movement. I learned from Beatriz Helena Ramos at Dada how to help creators build communities among themselves in order to catalyze an even larger movement. 🎧

I am inspired that people are proactively exploring the long tail wave of consumers and coming up with creative solutions. At the end of the day, it reminds me that the most important thing founders can build is a strong community.

If you’re interested in learning some of these hacks, check out the past couple of seasons of “Be About It.” You can listen to it anywhere — from Soundcloud, Breaker to Apple Podcasts.

I’d love to hear from you! What have you learned from the founders in the episodes? Do you have ideas of founders I should talk to? Leave me a comment below or reach out to the podcast on Twitter @thebeaboutitpod.

*The money was not technically free. The participants received a 50% match for every dollar they saved for 6 months, up to $500.

How Can VCs Make Entrepreneurship Suck Less?

So much ink has been spilled on how difficult entrepreneurship is.

And rightfully so! The more I talk to entrepreneurs, the more respect I gain for them. Living years without a paycheck, managing investors who are telling you to run fast in 10 separate directions and working with a team who is there because they believe in you when you aren’t sure if you believe in yourself is physically, mentally and emotionally exhausting. Yet, much of the VC rhetoric I hear praises someone’s ability to go through this process. They glorify the struggle. They say that if it was easy, everyone would do it.

But I think there is a fundamental problem in the entrepreneurship ecosystem today.

It is becoming so hard and so irrational to start companies that the people who we need the most (i.e. rational, smart people) are opting out. I am inspired by this post on Why More Women Don’t Run for Office. So much of what Raina Lipsitz discusses can be applied to entrepreneurship.

It doesn’t make any sense for highly qualified women (particularly women of color) to start companies.

After foregoing wages that they need to feed their families and communities, they are going to go through a round of disappointing interviews with VCs that will give them a 1-2% chance of receiving funding.

If we continue to structure a path to successful entrepreneurship as we do, we will continue to get the egomaniacs to enter and succeed.

Do you only want Travis Kalanick 2.0 running the companies of the future? I don’t. So how do VCs make entrepreneurship easier? I think there are a few fundamental things that VCs can do to make entrepreneurship more friendly. We should normalize taking a meaningful salary.

  • I have seen burn rates all over the place. Entrepreneurs I’ve talked to are everywhere between living at the poverty line to living in the SOMA Grand. This is crazy.
  • Why isn’t there more excitement amongst VCs to help entrepreneurs meet the lowest rank of Maslow’s Hierarchy of Needs? Why isn’t there more acceptance of the fact that the opportunity costs to these individuals is high already – with or without a salary?

We should treat entrepreneurs with humility.

  • As Kanye put it – You Ain’t Got the Answers, Sway. Entrepreneurs are building from scratch. Yes, we may have seen things similar to what they’re creating in the past, but almost everything since then has changed. The timing, competitors, funding environment.
  • We have so much to learn from each and every entrepreneur that walks through our doors. And the only way we’ll succeed in our jobs is if we take each opportunity to soak up the knowledge from these founders seriously and respectfully.

We should not ask entrepreneurs to sacrifice their lives for their companies.

  • When we’re doing this, what we’re saying is – making me money is more important than anything else you could be doing.
  • NYTimes describes this phenomenon in a recent article: “The guy is developing an app that lets you visualize how a coffee table from a catalog might look in your living room. I suppose that’s cool, but is it really more important than seeing your kids? Is the chance to raise some venture capital funding really “the ultimate reward”?” 

What is the ultimate reward is deeply personal to each person. But I hope that as VCs, we empathize with entrepreneurs who may have thoughts, lives and dreams outside of building the company we invested in. They are better entrepreneurs for it.