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  • 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 outmarketed 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 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 outmarketed 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 dollars, according to TechCrunch.com and we weren't even worth $100 million dollars.

  • 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.

The chances are you don't have a ton of money.

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A2 BEG US product free service raised dollar multibillion

How a Bootstrapped Startup Out Marketed My MultiMillion Dollar Company

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    Julia Kuo   posted on 2019/09/03
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